《公共部门经济学》(双语教学)课程教学大纲

《公共部门经济学》（双语教学）课程教学大纲一、课程名称：Economics of the Public Sector二、课程编号：07115020三、学时与学分：51学时，3学分四、考核方式：考试五、先修课程：先修课程是《西方经济学》、《财政学原理》、《国家预算》和《中国税制》等专业课程。

六、适用专业：财政学专业、税收专业、经济学专业、社会保障专业等七、课程教学目标：本课程的教学目的在于使学生通过学习国外公共经济学优秀原版教材（现选用的是美国著名经济学家David N. Hyman 的《Public Finance: A Contemporary Application of Theory to Policy》第八版，北京大学出版社，2005年7月），掌握有关公共部门经济学的基本理论框架体系，在深入理解原有专业知识的同时，能够直接运用英语进行科研活动、分析和解决实际公共经济问题。

本课程的具体教学目标：1、提高学生的专业英语水平2、培养学生直接运用英语进行财政学科研的能力3、培养学生运用英语进行国际学术交流的能力3、培养学生的国际视野、随时更踪财政学领域的国际最新动态八、说明：《公共部门经济学（双语）》是财政学和税收学专业本科生的基本必修课，是培养学生利用英文表达专业思想、直接进行科学研究和国际交流的重要工具，是培养当代国际型和开放型人才的必要环节，在财政学和税收学专业的课程建设体系中具有举足轻重的地位和作用。

本课程融外语与财政学知识的教学于一体，使外语与财政学知识同步获取，注重提高学生专业外语水平和直接使用外语从事财政学科研的能力；注重促进学生在财政学专业知识、外语水平及能力素质方面的全面发展。

本课程着重运用英语阐述公共部门经济学的基本原理和基本方法，在教学理念中注重运用当代经济学和教育学的崭新教学工具，力图合理安排公共经济学的结构体系，全面系统地地阐述公共经济学的基本内容。

并且争取在教学中较好地体现以下三个特点：一是反映公共经济学最基本、最必需和最重要的内容；二是结构合理，内容新颖，尽可能反映公共经济学的最新理论、方法和研究成果；三是把基本原理、基本知识和基本方法有机结合。

本大纲供财政学和税收学专业使用。

九、基本教学内容：Chapter 1 Individuals and GovernmentSUMMARY：Economics of the Public Sector is the field of economics that studies government activities. Modern Economics of the Public Sector emphasizes the relationships between citizens and government. This chapter discusses some issues as follows: individual, society and government; the allocation of resources between government and private sector; the mixed economy, market and politics; government expenditures in the United States.1. Individuals, Society and Governmenta. Public finance is the field of economics that studies government activitiesand the alternative means of financing government expenditures.b. Governments are organizations formed to exercise authority over the actionsof persons who live together in a society and to provide and finance essential services.c. Political Institutions are rules and generally accepted procedures thatevolve for determining what government does and how government outlays are financedd. Examples of Political Institutions:Majority rule; Representative government2. The Allocation between Private and Government Resourcesa. Private:b. Government:c. A Production-Possibility Frontierd. Distribution of Government Goods and Services3. The Mixed Economy: Markets and Politicsa. Pure Market Economyb. Mixed Economy4. Government Expenditures in the United Statesa. Government purchasesb. Government Transfer Paymentsc. Structure of Federal Government Expendituresd. The Structure of State and Local Government Expenditures in the UnitedStates5. Financing Government Expenditures in the USa. Taxes:b. State Budget Crunch of 2002c. Causesa)Cuts in taxes on business and individuals in the 1990sb)No sales tax collections on servicesc)Growth in costs of Medicaidd. Implications of a Graying America Social Securitya) In 2008 baby-boomers start to retire and collectb)The ratio of workers to retiree fallse. MedicareHealth care inflation is substantially higher than overall inflationf. MedicaidIncreased use of long-term care for baby-boomers6. How Much Government is Enough?The question of how much government is enough is an important one in any society. It is the tradeoff between public and private goods. When government gets bigger, its increased involvement comes at the expense of less private consumption.Questions for review：1. How does the mechanism for distributing and rationing most government services differ from that for distributing goods through markets?2. What is a production-possibility curve? Show how such a curve can be used to explain how private goods and services must be sacrificed to obtain government goods and services.3. Discuss the trends in government expenditures and outlays as a percentage of GDP.Chapter 2 Efficiency, Markets, and GovernmentsSUMMARY：Resources are efficiently allocated when the well-being of any one person cannot be increased without harming another. This condition is attained when all goods are consumed over any period up to the point at which the marginal social benefit of each good equals its marginal social cost. When prices in competitive markets reflect marginal social costs and benefits, market exchange achieves efficiency. Individuals opposing actions that improve efficiency act rationally. They are simply better of with a larger share of a smaller pie. To predict outcomes any political process, it is necessary to know the benefits of any changes proposed, to whom they accrue, and what changes in the distribution of income result.1. Positive and Normative EconomicsPositive Economics explains “what is,” without making judgments about the appropriateness of “what is.”Normative Economics: designed to formulate recommendations about what “should be.”2. Normative Evaluation of Resource Use: The Efficiency Criteriona. Pareto Optimalityb. Marginal Conditions for EfficiencyTotal Social Benefit; Total Social CostNet Benefit = TSB – TSCMaximum Net Benefit occurs where MSB = MSC3. Conditions under which the Market is Pareto Optimala. A perfectly competitive market system exists if:a) All productive resources are privately owned.b) All transactions take place in markets, and in each separate marketmany competing sellers offer a standardized product to many competingbuyers.c) Economic power is dispersed in the sense that no buyers or sellers alonecan influence prices.d) All relevant information is freely available to buyers and sellers.e) Resources are mobile and may be freely employed in any enterprise.b. If These Conditions are MetP = MPB = MSB and P = MPC = MSCSo P = MSB = MSCc. When Does Market Interaction Fail to Achieve Efficiency?4. Market Failure: A Preview of the Basis for Government Activitya. Government intervention may be warranted if a market exhibits:Monopoly power by one supplierEffects of market transactions on third partiesLack of a market for a good where MSB>MSC (i.e. a public good)Incomplete information about goods being soldAn unstable marketb. The Tax System and the Birth RateFamilies with children pay less tax than families without children: personal exemption; child tax credit.Historical data shows that an increase in the real value of the personal exemption is associated with increases in the birth rate.5. Equity vs. EfficiencyHorizontal equityVertical equity6. Positive Analysis on Trade-off Between Equity and Efficiencya. Introductionb. Compensation Criteriac. International View: Agricultural Subsidies, International TradeRestrictions and Global EfficiencyMany nations subsidize farmers with: Production subsidies; Export subsidies; Import constraints.This results in reduced agricultural efficiency.Since WTO agreements, such subsidies and import constraints have been reduced.Questions for review：1. How does trading improve efficiency? Why are trades that apparently provide mutual gains to those involved not undertaken?2. Show how equating the total social benefit of a good with its total social cost will result in more than the efficient output of the good.3. Efficiency can correspond to more than one distribution of well-being. Can the efficiency criterion be used to rank one distribution over another?Chapter 3 Externalities and Government PolicySUMMARY：Externality are costs or benefits of market transactions not reflected in prices. They are a dominant form of market failure to achieve efficiency in industrial economies. When the marginal external cost or benefit is priced so that buyers and sellers consider it in their decisions, an externality is internalized. To internalize an externality, the parties involved must be identified and the marginal external cost or benefit must be measured.The Coase theorem shows that, government assignment of rights to resource use, along with facilitation of free exchange of those rights, achieves efficiency, independent of which party is granted the right. When larger numbers of individuals are involved, a solution will require collective action to internalize the externality. Among the techniques used for this are corrective taxes and subsidies, regulations, and the establishment of standards.1. Externalitiesa. Externalities are costs or benefits of market transactions not reflectedin prices.Negative externalities are costs to third parties.Positive externalities are benefits to third parties .b. Externalities and EfficiencySocial CostsMarket equilibrium conditionsEfficiency Requirementsc. Positive externalitiesSocial Benefit2. Internalization of ExternalitiesAn externality can be internalized under policies that force market participants to account for the costs of benefits of their actions.a. Corrective Taxes to Negative ExternalitiesThe tax revenue is sufficient to pay costs to third parties.Socially optimal levels of production are achieved.b. Using a Corrective TaxThe greenhouse effect and a “Carbon Tax”c. Theory of the Second Bestd. A Polluting Monopoliste. Corrective Subsidies3. Coase's Theorema. The Definition and Significance of Co ase’s TheoremThe efficient mix of output will result simply as a consequence of the establishment of exchangeable property rights.It makes no difference which party is assigned the right to use a resource.If the transactions costs of exchanging the rights are zero, the efficientmix of outputs among competing uses of the resource will emerge.b. Limitations of Coase’s TheoremTransactions costs are not zero in many situations.However you allocate the property rights, the distribution of income isaffected.c. Application of Coase's TheoremThe Clean Air Act of 1990 allows for the sale of the "right to pollute."Firms face a tradeoff when they pollute. If they pollute, they forgo theright to sell their emission permits to others.In markets for electricity, Clean Air Act has motivated firms to shift tonatural gas and away from coal as a means of producing electricity.4. Recyclinga) Collecting waste for recycling costs three times as much as collectingit for disposal.b) Rural land is inexpensive.c) Recycling paper creates more water pollution and does not “save” trees;it simply reduces the number that are planted.5. Regulatory SolutionsInstead of using market forces to force firms to internalize externalities,we can use emission standards and apply these to all market players.a. Markets for Pollution Rightsb. Global Externalities:c. Costs and Benefits to the EPAQuestions for review：1. Explain why externalities prevent the attainment of efficiency when goodsare traded in competitive markets.2. How can a corrective tax adjust costs to reflect externalities? What effectswill a corrective tax have on prices, output, and pollution?3. Under what conditions are externalities likely to be internalized withoutthe necessity of government intervention?Chapter 4 Public GoodsSUMMARY：A pure public good is one that is consumed by all members of a community as soon as it is produced for any one member. Its benefits are nonrival and nonexcludable to consumers. Efficiency requires that the production of pure public goods be undertaken to the point where the sum of marginal private benefits is exactlyequal to the marginal social cost of production.Ideally, an efficient output of a pure public good could be achieved if each person contributed an amount equal to the marginal benefits received per unit of a public good. This is known as the Lindahl equilibrium. However, problems in inducing households to reveal their true preferences for public goods resulting from free-rider effects make this solution difficult to implement.1. Public Goodsa. Public Goods are goods for which exclusion is impossible.b. Characteristics of Public GoodsNonexclusionNonrivalryc. Pure Public Goods and Pure Private GoodsPure Public Good:.Pure Private Good:d. Marginal Costs for Provision of Public GoodsThe marginal cost of allowing another person to benefit from a pure publicgood is zero, while the marginal cost of providing a greater level ofpublic good is positive.2. Provision of Private Good and Public Goods: Markets and Governmenta. Price Excludable Public Goods vs Congestible Public Goodsa) Price Excludable Public Goods (Excludability, but no rivalry)b) Congestible Public Goods (Rivalry but no excludability)b. Education as a Public Gooda) External benefits:It helps us live in a civil society.It has a “socializing ” function.It teaches the importance of following rules, obeying orders, and workingtogether.It provides students with basic skills like punctuality and the abilityto follow directions that increase their productivity as workers.It helps students identify their abilities and choose appropriateoccupations, thereby increasing productivity levels for a nation.b) Education as a Private GoodEducation has characteristics of a private good:3. Demand For a Pure Public GoodDecisions of Market demand for a Pure Private GoodEfficient Output of a Pure Public GoodLindahl Pricing: Everyone in a group cooperates and participants each pay their marginal benefit.Lindahl Equilibrium4. Free-riderFree-rider occurs when people are not honest in stating their Marginal Benefit, because if they understate it, they can get a slightly reduced level of thepublic good while paying nothing for it.5. Illustrating Voluntary Contributions to a Public Good: The Gulf WarUnder the premise that defeating Iraq in the Gulf War in 1990 was a public good to be consumed by the industrialized economies and Arab nations, each nation was expected to contribute.6. National Defense and Homeland Securitya. Defenseb. Homeland SecurityThe new department merged several agencies from the departments of Justice,Transportation, Treasury, Agriculture, Energy, Health and Human Services,and Commerce.Questions for review：1. What are the essential differences between pure public goods and pure private goods?2. Although the marginal cost of producing a pure public good is always positive, some consumers can enjoy the benefits of pure public goods at zero marginal costs. Explain the apparent paradox, if there is one!3. How will shares in the finance of public goods vary among contributors ina model of voluntary cooperative supply of such goods?Chapter 5 Public Choice and the Political Process SUMMARY：A political equilibrium is an agreement on the level of production of one or more public goods, given a specified rule for making the public choice and the distribution of tax shares among individuals. Collective, or public, choices are agreements resulting in political equilibria on issues of common concern. Political equilibria are influenced by politicians and bureaucrats. When all voters have single-peaked preferences, parties will tend to move to the median position to win elections.When all voters do not vote, the median most-preferred outcome of all citizens could differ from the median most-preferred outcome of all voters. Logrolling is the explicit trading of votes on issues of great interest to voters. When two or more issues are voted on simultaneously, implicit logrolling can occur. Models of bureaucratic behavior presume that bureaucrats attempt to maximize the size of their budgets.1. The Supply of Public Goods Through Political InstitutionsPublic Choice involves decisions being made through political interaction of many persons according to pre-established rules.2. Political Equilibriuma. Tax Shares or Tax Pricesb. Individual's Choicec. The Choice to Vote or Notd. Determinants of Political Equilibrium3. Median Voter ModelConcept of Median Voter ModelImplications of Median Voter Model4. Political ExternalitiesDefinitionPolitical Transactions Costs5. Preferencesa) Single-peaked pr e ferencesb) Multi-peaked preferences6. Pairwise Cyclinga. Arrow's Impossibility Theoremb. Conditions of Arrow’s Impossibility Theorem7. Political ProcessesConstitutions; Minority Rule; Majority Rulea. Costs and Benefits of Collective ActionBenefitCostb. Possible Alternatives MethodsUnanimityPlurality rule (more than 3 outcomes possible)Point-count voting (enables voters to register the intensity of their preference)Instant Runoffs8. Political Institutions in U.S. Citiesa. In the United States, municipal government takes two basic forms.b. Researchers have found that relative to cities run by managers, those runby elected mayors:a) Have greater capital stock (roads, parks, police and fire stations),b) Use relatively less labor in providing public services,c) Spend the same amount of money.c. Forms of City Government and their Effects on Spendinga) Manager/Council GovernmentUnelected city manager makes most executive decisions, with policyrecommendations by elected city council.b) Mayoral Governmentc) Results:9. Logrolling or Vote TradingLogrolling is the act of voting for something you would ordinarily vote against so that someone else will vote for something that they would ordinarily vote against.a. Implicit Logrollingb. State Government Spending and the size of the Legislature10. Special InterestsSpecial Interests are groups that lobby on particular issues.11. Bureaucracy and the Supply of Public OutputOfficials measure their power in terms of the size of their budgets, notthe efficiency of the outcomes they generate. This causes bureaucrats tohave a self-interest in inefficiently high levels of government spending.Questions for review：1. How does a person decide to vote on any issue that proposes to change the amount of public goods supplied by the government?2. Given tax shares, explain why only the median voter consumes his most-preferred quantity of a public good under majority rule.3. Under what conditions will the median peak correspond to an extreme outcome, such as no output of a good?4. What is logrolling? Under what conditions is logrolling likely to emerge? How can logrolling prevent the attainment of efficiency?A exercise of speech：Imitation of president or finance ministerChapter 6 Introduction to Government FinanceSUMMARY：Government finance transfers use of productive resources from individuals and business firms to the government. Taxes are the major method of government finance. The method of government finance used can have an impact on political and market equilibria and on the efficiency with which resources are employed in the private sector.A basic problem in government finance is the distribution of the costs of financing public goods among citizens. No one best way of accomplishing this exists that will satisfy all citizens. In addition to affecting the political equilibrium, the method of government finance chosen often has significant and complicated effects on the private choices made by citizens.1. Federal, State, and Local Revenuea. Sizeb. Sources:a) Taxes:b) Feesc) Tuitiond) Licenses2. Purpose and Consequences of Government Financea. Political Equilibriumb. Market Equilibrium and Its Efficiencyc. The Distribution of Income3. Taxesa. Tax Baseb. Tax Rate Structurea) Marginal Tax RateThe amount by which the tax increases when the tax base increasesb) Average Tax RateThe total amount of tax divided by the total amount of the tax basec) Tax bracketThe range of the tax base in which the marginal rate is constantd) Descriptors of the Tax Rate StructureA Progressive TaxA Proportional TaxA Regressive Taxe) Average Tax Rates in the US4. How Should the Burden of Government Be Financed?a. Benefit Principleb. Ability-to-Pay Principle5. Criteria for Evaluating Methods of Government Financea. The Criteria are:a) Equityb) Efficiencyc) Administrative easeb. Horizontal and Vertical EquityHorizontal equityVertical equityc. Both concepts are subjective.a) “Economic capacity”b) “Ability to pay”d. Tax Compliance, Avoidance and EvasionTax EvasionTax Avoidance6. Alternatives to Taxationa. Debt Finance is the means of financing expenditures by issuing bonds.b. Inflationary Finance is the means of financing expenditures through theprinting of money.c. More alternatives to Taxationa) Donationsb) User Chargesc) Earmarked Taxesd. User Charges and the Transportation Infrastructuree. User Charges and Efficiency7. Government EnterpriseLocal Utilities8. LotteriesState LotteriesState Lotteries account for more than 3% of state revenues.Lotteries pay out a smaller portion of revenue to winners than other forms of gaming (horse racing, casinos, etc.).Questions for review：1. How does government finance affect both political and market equilibria?2. What is the difference between horizontal equity and vertical equity?3. How can inflation be viewed as a form of taxation?4. What criteria can be used to price the output of government enterprises?Chapter 7 Taxation, Prices, Efficiency, and the Distributionof IncomeSUMMARY：Taxes can affect prices of outputs and inputs, causing losses in efficiency by preventing prices from accurately reflecting social costs and benefits of goods and services. Price-distorting taxes induce individuals to take actions with lower social value than they would choose if no such tax existed. Lump-sum taxes result only in income or wealth reductions; they do not cause losses in the efficiency with which private resources are used.The burden of paying a tax can be shifted from people who are liable for the tax to other groups. This occurs when prices change as a result of a tax. A multimarket analysis of incidence considers the effect of tax-induced resource flows on the prices of inputs and outputs in markets other than those directly taxed. Data on income shares by income class can be tabulated with a Lorenz curve, which plots the percentage of households ranked according to income against their share of income.1. Lump-Sum TaxesA Lump-sum tax is a fixed tax that is owed by everyone and is not subject toanything taxpayers can change.It is independent of income, consumption, or wealth.An example is a Head Tax, which is constant for everyone.Inefficiency in Taxation and the Lump-Sum Tax2. Price -Distorted Taxesa. Individual Excess Burden of a TaxThe individual excess burden of a tax is the loss in well-being when ataxpayer pays taxes under a price-distorting tax instead of under alump-sum tax.b. Community Charges in the U.K.The Thatcher government replaced local property taxes with a form oflump-sum tax called “the community charge.’’unfairnessc. Unit TaxesA unit tax adds to the price by a fixed amount. Examples include the 32cents per pack of cigarettes and 24 cents per gallon of gasoline infederal taxes.d. Tax TermsThe Gross Price (PG)The Net Price (PN)e. Excess Burden of a Unit Taxf. Efficiency Loss Ratio of a Taxthe deadweight loss per dollar of revenue raised DWL/R .3. Incidence of a TaxThe Legal Incidence.The Economic Incidencea. Shifting of TaxesForward ShiftingBackward Shiftingb. Ad-Valorem Taxesc. Using Excise Taxes on Alcohol to Internalize Externalitiesd. Independence of Legal and Economic Incidence4. General Equilibrium Analysis and ShiftingWhen one good is taxed and another good is not taxed, the impact of the tax is not confined to the taxed good.This has the effect of equalizing the after-tax rate-of-return.Government Taxes and Expenditures and the Distribution of IncomeThe Tax IncidenceThe Expenditure IncidenceThe Differential Tax Incidence5. The Lorenz CurveThe Lorenz Curve maps the cumulative percentage of households against their cumulative percentage of income.The Gini CoefficientQuestions for review：1. Why are most taxes likely to cause losses in efficiency? Be sure to relate your answer to the impact of taxes on prices.2. Why should the excess burden of taxation be added to revenue collected from taxes in order to accurately measure the opportunity costs of government-supplied goods and services?3. Under what circumstances does a single-market analysis of tax incidence givea good approximation of the multimarket incidence?4. What is a Gini coefficient? How can this coefficient be used to determine the impact of taxes on income distribution?Chapter 8 Budget Balance and Government DebtSUMMARY：A budget deficit or surplus reflects an imbalance between expenditures and revenues. Deficits increase the federal debt and also can contribute to higher market interest rates and increased inflation. Borrowing to finance public expenditures postpones the tax burden to the future. The federal debt is largely internal in the sense that it is owed mainly to U.S. citizens and institutions. Repayment of the federal debt does not imply a significant drain of either capital or productive opportunities out of the nation.State and local debt holdings are likely to be more external to the issuing jurisdiction than are federal debt holdings, implying that repayment of such debt might withdraw significant amounts of resources to other jurisdiction. The burden of the government debt can be defined as the decrease in well-being of citizens who are taxed to pay off the principal and interest on past debt.1. Budget TermsA Budget SurplusA Budget DeficitThe National DebtNominal figuresa. High-Employment Deficit or SurplusThe budget balance is altered significantly by the state of the economy.The high-employment deficit or surplus is what the surplus would be ifunemployment were low.b. Measuring Budget BalanceOn Budget vs Off BudgetSocial Security and the Post Office are run off budget.c. Unified BudgetThe Unified Budget is the sum of the on- and off-budget deficits andsurpluses.a net deficita net surplusd. National Income and Product Accounts Budgete. Real Surpluses and Deficits2. Economic Effects of Federal Budget Deficitsa. Ricardian Equivalenceb. Economic Effects of Federal Budget Surplusesc. Budget Balance, National Saving, and Economic Growthd. Incidence of Deficit FinanceLower growth rates.3. The Government Debta. January 2003, Federal Debt $6.4 trillion, State and Local Debt $1 trillionb. Net Federal Debtc. Internal and External DebtThe Internal DebtThe External Debt4. State and Local Borrowinga. General Obligation vs Revenue BondsGeneral Obligation BondsRevenue Bondsb. Social Security and the DeficitSocial Security Surpluses5. Burden of the Debta. Impact on future generations:b. Financing Capital by State and Local GovernmentsCapital expendituresThe benefit principle6. National Saving and Government Budget BalanceNational saving in the United States remains low by international standards.A compelling argument in favor of running a budget surplusQuestions for review1. Explain why a budget deficit in a given year when the unemployment rate is 10 percent could be, in fact, a surplus in that year if the unemployment rate werw 5 percent.2. What is the significance of the distinction between internal debt and external debt?3. In what sense does repayment of the federal debt constitute a redistribution of income among citizens?4. How can deficit finance influence political equilibrium? Has deficit finance been associated with increased federal investment in the United States?Chapter 9 The Theory of Income TaxationSUMMARY：Income is viewed by many as an appropriate index of ability to pay taxes. For tax purposes, income is usually measured as an annual flow of earnings. The economist’s definition of income is, however, an annual accretion of purchasing power. This is known as comprehensive income and is measured as the sum of annual consumption and increased net worth.A general tax on comprehensive income would tax all income at the same rate regardless of its source or use. The tax on comprehensive income causes wages, as seen by employers and employees, to diverge. This results in an efficiency loss in labor markets. Taxation of interest income causes the interest rate paid by investors to diverge from that received by savers. The result is a loss in efficiency in markets for loanable funds used to finance investment and accumulation of assets.1. Income Taxesintroduced as an emergency measure during the U.S. Civil War.。